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What Happens When America Goes Bankrupt?
Submitted by Simon Black via Sovereign Man blog,
Last week in the Land of the Free, I heard a radio campaign ad for a local political candidate while in Texas.
In the ad, he was talking about the debt and excessive government spending. And then he said something along the lines of, “We need to get this under control before America goes bankrupt.”
‘Buddy,’ I remember thinking, ‘America isn’t going bankrupt. It already IS bankrupt.’
Just so that we don’t mince words, my dictionary defines ‘bankrupt’ as “any insolvent debtor,” i.e. a debtor whose liabilities exceeds assets.
That’s the US government, by its own admission.
As we’ve discussed before, the US Government Accountability Office (GAO) publishes financial statements each year in which they list all official government assets and liabilities.
The liabilities far exceed the assets. Big time. And the hole is getting deeper each year.
At this point the government’s net worth is roughly NEGATIVE $17 trillion, about 110% of GDP. That’s textbook insolvency.
The only reason the US government is still able to service its debts is because they are borrowing money just to pay interest… and because the Federal Reserve keeps printing money to buy up US debt.
These are hardly sustainable fiscal strategies.
What really concerns me from my travels in the US, though, is the clear divide that seems to be forming.
The rich are getting richer by the day thanks to all the heavy financial lifting being performed by the Federal Reserve.
If you are in a position where you only allocate 10% of your income on living expenses, and 90% of your income on investments, you’re doing extremely well.
The Fed is pushing up the values of stocks, bonds, luxury real estate, fine wines, art, etc. So you’re seeing 90% of your income increase by, let’s say, 10% per year.
But the other side of excessive debt and money printing is retail price inflation. Record high prices for beef, eggs, medical insurance, etc.
And if you’re one of the vast majority who spends 90%+ of your income on living expenses, and has (if you’re lucky) 10% left over to save or invest, you’re experiencing an entirely different phenomenon.
If the cost of living increases by 10%, suddenly you need to spend 99% of your income on living expenses. So you either destroy your savings… or you have to reduce your standard of living.
This is one of the greatest redistributions of wealth in history, from poor to rich, courtesy of a twisted, perverted system of central banking masquerading as capitalism.
This is the stuff that revolutions are made of. It’s already happening around the world from North Africa to Southeast Asia. And it’s starting to spread to the West.
I invite you to explore this further with me in today’s Podcast episode, which you can access here.
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Uhmmmm hellooo mcFly. America is bankrupt hence the printing. That's okay though we can always print an extra billion for the Ukraine, and pass it on to the tax payer in form of inflation. They won't mind.
...The USSA/Israel will be instigating a Major False Flag Event very soon.
USA bk means SP500 goes to all time highs. Vix to .001, Gold to $35
The United States has been in bankruptcy since 1933:
https://docs.google.com/document/d/165i0dicryJ_KtzCr6agR6O6v4XaRM2EDr6f1...
If more people understood this, we would be on the way to recovery, both economic and societal.
If they taught this in the public schools, we wouldn't be in the mess we are in today.
The question is: why do not more people understand this, and why is it not taught in school?
BONUS QUESTION: What is the "United States", i.e. who is the actual bankrupt entity?
I am Chumbawamba.
To my understanding, and I may be off, the UNITED STATES is a corporate entity and not the United States of America, per se. The "assets" are the various other corporate entities with Corporate IDs or Social Security Number. Those Corporate IDs are securitized collateral for the UNITED STATES and the dividends paid to the UNITED STATES are the Federal Income Taxes collected by the IRS. What do I win?
Something like that.
Bonds will never default because the Fed can redeem them in their legally defined dollar form and a bondholder will thus be paid off and there is no default. Therefore there can be no bankruptcy.
Silly speculation.
Will the dollars be worth anything? Irrelevant to the issue.
There can be no bankruptcy.
"Will the dollars be worth anything? Irrelevant to the issue." -
LMFAO!!!!
Right, I'll remember that the next time I am paying the bill on a few thousand gallons of diesel.
Tell me, crash, when you are fucking your wife's best friend, do you tell her that "there can be no infidelity".
You are talking semantic bullshit now.
As we’ve discussed before, the US Government Accountability Office (GAO) publishes financial statements each year in which they list all official government assets and liabilities.
I'm glad there are no unofficial assets or liabilities, makes life easy.
145 million moochers of freebies and 86 million payers into the till.
The reset is going to be very harsh.
They have a pill for that, weather they make you take it or not is the question.
I can't decide whether Simon is Captain Obvious or Captain Oblivious.
Either way, he's a Pilot.
Met 'm once in a bar in Kowloon. Reedy chap with a voice like a foghorn. Ordered up some crissy and put it all on red.
+1 for compelling little quib.
negative rates They have a pill for that, weather they make you take it or not is the question.
----
They also have bullets and prison camps. At least there is a choice. sarc
You are talking semantic bullshit now.
With regards to the word "bankruptcy", better get used to it.
Print enough, reflate the value of federal assets, et voila!
Show the prospectus?
I assure you I have not been securitized.
As to the underlying article, the system was always insolvent, it was just a matter of when the insolventency showed up... usually 60-80 years before the equation start taking command and the liquidation begins.
The article makes little sense. The author seems to believe you can have a system based on interest attached to your medium of exchange and there is some fantasy land at the end of the road... sorry buddy... it was over when they started the current system in 1944 which is exactly like the previous system, and the one before that, etc.
I will tell what happens:
- Peak
- unable to go over the Peak
- collapse
- Liquidation of the walking unfunded liabilities... my guess 1-2 billion.
"i.e. a debtor whose liabilities exceeds assets."
Wrong.
After the world begins to reject the dollar as reserve currency and the SHTF, then YOUR assets become the gov'ments assets...
In the end, we are like casino chips to the banks/fed...
Perhaps, but remember, when fraud is the status quo, possession is the law.
Good luck to the banks/fed in trying to take possession of those assets...
They'll find a way.
They got obamacare thru on one "independent" congressmans' vote on the promise that it wouldn't fund abortions...
But it does anyways...
True we are all on the same floating rock, but I do not acknowledge I am the someone's or something's property.... if you disagree come to my doorstep and find out first hand.
I have had everyone and their mother come after my assets including your so called government... they all failed. However, not much I am going to do if someone starts throwing nukes on my house.
I actually enjoy this entertainment... everyone crying at the end. I might be liquidated in the end but I am not unfunded.
You (the living soul) haven't, but the name registered at birth, a corporation, has been securitized. And by attaching your labor and wages to the Social Security Number, which in turned is attached to the registered name, and by signing a W4 or similar, you pledge your fruits to the parent corporation, the United States.
There is no law requiring one to have a Social Security Number. It is all voluntary.
I am Chumbawamba.
John Doe vs JOHN DOE, one is the corporate you (latter) the other one isn't.
So can you revoke your Social Security number? Most don't have the option of declining as their parents submitted for it. I didn't have a SS # until i was 12 but now how to be rid of it and still operate within the national boundaries? If anyone has the answer i'd be interested in hearing it.
Edumacate thyself...
Are you sure, Lando? Was a certificate issued upon your birthing (berthing)? Were you issued a Social Security (asset I.D.) number (or equivalent)?
Are you expected to pay any form of tax to your Federal Gubmint?
If you answered yes to any of the above, you have been securitized.
A fire side chat with barney rubble.
Well, obviously if they actually taught this, we wuld have overthrown the corrupt .guv and hung a bunch of assholes by now.
I like to study words, especially legal definitions:
I'm not claiming the etymology between those two words and the word "constitution" didn't diverge at some point, but it is interesting, isn't it?
Here's something else to consider, the preamble of the Constitution for the united States of America:
That word "secure", what does it mean in a legal sense?
Hmmmmmmm.
I am Chumbawamba.
But what are words for?
http://www.youtube.com/watch?v=IasCZL072fQ
I think the argument is that the Organic Law (Constitution) has been replaced by Corporate (Admiralty) Law.
Your Rights are no more; you are governed by an international business (corporate) Law.
When the US went bankrupt, it was taken over by business/contract law. Any assets of said USA became the property of the Lien-holders (Banksters) who own US today.
****
Now, in reality, this Maritime configuration cannot supplant Natural Law (God-Given, etc). TPTB can claim what they want- because they have control of State Violence. But, they are actually Wrong. If everyone realized this, TPTB wuld be tracked down and executed, or at least imprisoned for Life.
That is indeed the argument, and it is absolutely, totally, completely irrelevant, moreso than arguing over Titanic deckchair placement after the iceberg has already been hit. Because in reality, law of this sort means nothing whatsoever to anyone, least of all the people with the money and the guns.
Rights exist only in the minds of the plebs who are naive enough to believe in them. You can't lose something you never had. What we have, if not in all theory then at least in reality, were freedoms, revocable privileges granted at the pleasure of the people holding the guns, which is what all politics reduces to, always.
The Frank Zappa quote about the illusion of freedom has been used quite often in these comment threads, and this is a good place for it to be mentioned again. Why did anyone bother with these illusions - illusions of rights, freedom, free markets, etc.? Because someone was making money off of it, and lots of it. Debating the nuances of the illusion is an utter waste of time.
The DC US can claim to be anything they want under any legal structure they desire, but I am an American citizen of the American country--the people and the land that they inhabit.
I an American citizen, not a DC US subject and my weapons are my passport and my guillotine is my justice department.
“See you on the battlefield, as I am not going 'camping'."
+100
Correct, your Natural Rights exceed any limits placed by Man-- as long as you do NOT hurt the Common Welfare.
Curioulsy, I wonder if the admiralty scenario would be found to ONLY apply to D.C. residents....
Though I already knew this, it is still very painful to read. With the way things are going though, I think the bankers may have it mind to abandon us for greener pastures. They have failed to take our guns. Developing third world countries without guns may be a better bet.
They seem to have agreed to pay the interest in gold, but then made it impossible to collect it.
What happens is Russia annexs Cuba, China invades Taiwan and Vietnam and South Korea and tries getting Japan and Australia.
Europe goes bonkers and attacks Russia before it attacks them.
Israel nukes Iran and vice versa.
North Africa blows itself up.
South Africa blows itself up
South America blows itself up
Mexico... ah never mind
Only one thing left to do
Let's drop the BIG one now!
Let's drop the BIG one now!
http://www.youtube.com/watch?v=PGO42gvCSPI
I declare war on the world
War in outer space
I declare war in a nutshell
War all over the place
I declare war on every government
War against all odds
I declare war on your inner sanctum
On your blood thirsty gods
World war three
Be all that you can be
World war three
I declare war on the axis of morons
All out war on complacent consent
I declare war on the war against drugs
Rape and Slaughter of the innocent
http://m.youtube.com/watch?v=lYiUCmD7xEA
A nuke ground war seems rather unproductive and assures M.A.D.
Can't we all agree to EMP this rock and have a do-over?
Optimist.
it is just a few zeros in the computer body ... this is all BS.
How can you go bankrupt when you can add as many zeros as you like in the computer ... HOW???
the concept of bankruptcy doesnt apply to a country printing his own currency .... it can print as much as needed
Arius, go fuck yourself.
ever hear of unfunded liabilities?
Look it up!
http://www.usdebtclock.org/
i am not saying all is well .... i am just stating the bankruptcy doesnt apply here ... you need more money, you print more ... yes, it will be inflation, may be hyperinflation, but you can always print more .... bankruptcy applies to a situation when you dont have cash.
It's not money you are printing , it's currency, and when you have to borrow to service your debt and print in order to purchase moar thereby reducing purchasing power you are bankrupt.... Period.
And what is the currency of the Empire? Why debt, of course.
and endless wars
Endless lost war on drugs.
Well, fine then Mr./Mrs. Semantics. According to the all-knowing Wikipedia:
"In the United States, bankruptcy is applied more broadly to formal insolvency proceedings."
So in the United States, the term bankruptcy can extend to the write-off of existing national debt by means of replacement of an existing national currency with a new currency at a who-knows-what fraction of a cent on the old dollar. Formal enough for ya?
it is not about semantics....it is about what is next ...
Ever hear of something called collateral or counterparty risk?
Unfortunately, the currency can devalue against "things needed for existence" faster than they can print. When you need to raise more debt to pay your ongoing bills, you are not only bankrupt but well and truly fucked.
Your name sounds like you have anal pain. Green shoots and lala land is where you live and dream of.
Get your fucking ECONOMICS 101 copy then come back here.
Gas I think.
You could not be further from the truth. If that were the case, the wole world would prosper. What happend in Weimar Germany 1923? Eventually you will quickly run out of zeros! Add 100 zeros, then 1000 then a Gogol, then a Gogol^2 then a Gogol^Gogol then a (Gogol^Gogol)! etc etc. And no computer, let alone a piece of paper could keep up with the zeros.
USA will never be Germany!
Remember who won World War II? Never forget it!
America is still a gret country and you bet against it at your own peril ...
.
Yes, the same that won World War 1: the banks. Never forget it!
It's a failing state which is still in the process of falling. Try not to let it land on you.
Thanks, Stooge- for going easy on Arius. Doesn't know much, but may be worth saving. Who/what should we introduce to him/her?
Jordan Maxwell?
Bill Cooper?
The Money Masters/Secret of Oz/Bill Still?
Damon Vrabel/csper? (My personal favorite)
Shit! There are so many. Where to start?
Russia won WWII.
Too much Hollywood indoctrination.
WTF has who won WWII got to do with printing money? Germany printed to pay debt and created hyperinflation and this started WWII. The USA is printing to pay debt and will go down the same path.
What difference , at this point, does it make ?
There are still some widows ,and orphans left to pillage.
The only solution to any of this
http://www.rapidtrends.com/it-almost-became-money-united-states-notes-ve...
Japan has been broke as a joke for 20 years and they keep humming along. 3 reactor meltdowns don't even effect those people. We should be fine living a fairy tale for at least 20 more years.
The masque comes off?
And reveals the Chinese flag.
bankruptcy is being exported FROM the west.
Federal FUCKTARDS are on it,,,,,, Oh Wait..... Is that The Xi/Putin collections office calling?
They won't collect, they'll just stop selling new stuff. Should be the trigger for turning back on all that manufacturing capacity - oh yeah, it's all obsolete now, or owned by foreign companies.
. . . or scrapped and sold back to us as trinkets.
so simon, what's your solution besides selling advice that can be found on google search?
don't call me buddy, guy.
Don't call me guy, buddy!
Don't call me buddy, pal!
I'm not your pal, friend!
Don't call me sister, buddy!
Don't call me, i'll call you.
https://www.youtube.com/watch?v=NU5xA6ty0a4
Damn Right, I've Got the Blues!
The Fed is evil in general. Yellen the felon is not the only criminal org. It is all of the morons in Washington enabling this mess.
"Goes"...
LMFAO!!!
Inquiring Minds
Through normalization, public education and law enforcement in public housing, the empire moves debt as money, hiding the paper debt conversion to asset, with the willing participation of the majority bred on debt to do so, which ‘needs’ to belong to a peer pressure group as security. If you need a doctor to have children, you are screwed right from the beginning.
The empire labor market isn’t any more real than the S&P is a real stock market. Buffet doesn’t care about beating S&P inflation normalization, so long as he matches it with others, and that’s pretty easy considering their vertical collection of regulated-in monopolies. He can post any numbers he wants. Davos is about deciding what numbers to post.
If you look at real household budgets, you will see the transferred cost of technology and tax inflation, the magical wealth effect. On the horizon being crushed you will see the homeless, who still believe they are homeowners, watching their real disposable income get crushed in the VIX margin ratchet. For the upper class with rent leverage, the problem solution is still the solution. The only reason it is voicing concern is because the cliff edge is collapsing toward it.
Let’s see, the banks won’t touch land, but will be happy to issue another mortgage for cash, debt as money, until the refi-flippers bankrupt themselves in the process of chasing debt. Might want to get a job at a university hospital where all that debt is colliding.
And what do you suppose those critters slicing and dicing down to the individual psychographic are doing with all that data in the cloud? How many times have the French sold their own to Germany? Who/what can cross borders freely, who/what can cross at a price, and who/what cannot cross at any price? What do you suppose the Cold War was about? Do you really think that the empire is organized into nation/states, or just its version of labor?
What does the Snowden timeline tell you about how the event horizons operate?
Rigged is a relative term, to the automatons benefiting from the outcome.
Sorry; there is no Santa Claus.
The empire stitches consumer peer pressure horizons, grown in national farms, across borders, training them to consume beyond production and seek free crap to make up the difference, convincing them that a national government printing its own paper cannot go bankrupt, enacting ever more laws to chase down those terrible 1% productive individuals, into ever smaller legal borders, to complete the circle. Funny, the laws don’t apply to the landed class, or the upper middle class serving as the example to those below, in the ponzi lottery.
That’s why labor is always building two transmission mechanisms ahead, leaving a third behind for the empire. The Internet is just a more efficient version of something labor left behind decades ago, as is Facebook, which is why the empire cannot make it work. World wars occur because the empire consumers strangle themselves with debt, misallocated capital, assuming the empire is all powerful, and the producers have no exit. Legacy takes the income during the demographic boom and the land back in the demographic collapse, growing in both directions, until it collapses.
Greece and the others have all seen this show many times, over thousands of years.
Kev, based on this comment alone, Tyler(s) should invite you to contribute- Assuming you're not currently a Tyler. So much info conveyed/implied in so few words. If you expanded just a little on the topics you touch, you'd have an epic documentary of the current status-quo. It seems like you have the skillz to do it, too.
the is the great gatsby age revisited; a last fling before we go off the cliff!
I think you are right, Falak. I was walking along Valencia Street in S.F. last night pondering the mood of the city's youth in the midst of this second NAS bubble. I knew there was an important difference between 2014 and 1999 (other than the fact that 1999 was much larger) but could not put my finger on it.
Then it struck me: Apprehension. This crop of youth knows, at a subconscious and often very conscious level, that it is and we are on a precipice of un-sustainability. I wasn't in Tech in 1999 but I was daytrading and we were all partying hearty and barrelling into a great unknown of sorts.
We don't have that luxury or innocence any more. At least, I certainly don't. I could be projecting some here but I don't think so. Many fewer are taking part in this party and drug addicts and the washed out abound on the edges. The econ is in terrible shape outside this bubble zone.
it is true that the fed can print as much as it wants.
also true that the fed is not, fo rmost purposes, part of the government [like foia requests] and is owned by a cartel of privately held banks, specifics of which you the taxpayer are not able to discover.
Also true that the US government spends more currency than it has, and does not have the reserves to pay its debts.
Taken together, the US government is insolvent, has entered the stage of borrowing just to pay interest, income and especially wealth disparity, which was off to the races after the gold standard has accelerated with all the printing, and yet Paul Krugman defends his defense of the status quo as "progressive" - mesmerizing self-described progressives and actual cryptofascist statists all over this land.
I don't know what the answer is.
But I know Fonester doesnt know either.
I think we should all just chill out and do some skiing in the Andes for crissakes.
Uhhh...aren't most, if not all, of the rest of the nations (OK for argument's sakes let's limit it to the G7 former G8) bankrupt, too?
If everyone smells, does anyone stink?
That politician doesn't want to get any of 'his' spending plans fucked up lol.
You said When. You're an IDIOT! Bankruptcy court was heald 43 years ago.... (1971)
That's only the most recent occasion f16. Our first was "ratified" in 1789. Wanna guess what it is called? The (re)Constitution.
It's a legal term, and in that context- it doesn't mean what you think it means.
Actually, I see "Central Banking" as synonymous with "Communism."
When you get right down to it, I mean...
That is not true. Compared to central banking, communism *could* work (but only compared to central banking)
Today I have ZH SUPER POWERS!!!
I vote up and the greenies go up 3, I vote down and the redies go up 10!!!
I control the opinions today!!!
Ooohhhhh .... it"s you ... until today i did not know it was you Barzini...
lasvegsapersona's a pimp. It was Barzini all along.
what happens? world war 3 happens.
the golden rule has become the gun down rule.
We could run with that for awhile, ready or not, not ready, ready or not, not ready, ready or not, she loves me, she loves me not. She loves me, she.......
Bankruptcy in only 'real' when people won't let you get moar stuff .... and as of yet this hasn't happened.
Mike Norman says we're not bankrupt, therefore we probably are.
That guy might be one of the three biggest dipshits on the planet. He's so out there that sometimes I'm not sure if he's not an example of Poe's Law at work.
Seriously, a downvote? Is that you, Mike?
I can appreciate the fact the analysis was based upon "WHEN" and not "IF." No sense in sugar-coating the inevitable...the ship has hit an iceberg.
Thomas Andrews: [interrupting] The pumps buy you time, but minutes only. From this moment, no matter what we do, Titanic will founder.
Ismay: [incredulously] But this ship can't sink!
Thomas Andrews: She's made of iron, sir! I assure you, she can... and she will. It is a mathematical certainty.
To think the Fed has played all their aces is naive. Their funding ability is eternal. They cannot and will not relinquish control of the world banking system because there is no incentive to do so. Why should they give up power? As unimaginable as it is, this entire world financial predicament will end as it always has in the past... in war or some other catastrophic occurance that will wipe the slate clean. I predict such an event to be decades away based upon very powerful forces of momentum that will remain unaltered.
If you believe that, then prepare for the oligarchy to harvest young blood to keep themselves alive.
Oh, they're already doing just that?
I hope the system stays "solvent" long enough to pay "my" social security. So, I am hoping parts of what you say are true.
Surely, the fact that you can give every US citizen a $Trillion dollars is the very sign that fiat currency is a valid and solid concept!!!!!!!!!!!!!!!!!!................Yippee Ki Yay!!!
I wonder if and/or when the so called "progressive" useful idiots will realize that Obama has been trying to spend enough money so as to polarize and destroy the US through an unrecoverable fiscal crisis.
I wonder if the useful idiots know that they will not be protected by the destruction and will be left to suffer with the rest of us.
Meanwhile, Feds preparing to charge Bundy ranch supporters over Utah protest
Federal officials have opened up an investigation into whether or not Cliven Bundy supporters damaged a protected archaeological site when they rode all-terrain vehicles through it during a weekend protest.
I can't fab to shitty free doom porn.
America is not bankrupt. Bankrupt is when the suckers stop accepting the useless pieces of paper you hand them for their goods and labor. America SHOULD be bankrupt.
At this point, it looks like it is a long way off.
America is bankrupt when the non-America-world rejects the USD, and that could happen very fast (think China and Russia and Brics dumping their USD/treasury holdings in a coordinated fashion). So the fate of US solvency is not any longer in the hands of the US, but Washington did not get the memo yet, or did they now ?
Gaddafi and Saddam Hussein both tried that (not taking dollars and demanding goods or other assets for their oil) they got killed for it, part of the reason we're in Ukraine is Russia really doesn't want dollars or Euros, they get all they want from China.
This article is all academic. The US is already bankrupt! What happens is exactly what we're witnessing right now. Domestic social and moral decay, infrastructure decay, stifled wages, market bubbles, rigged markets, unserviceable debt, foreign military intervention, media control, food stamps, educational deficiencies, propaganda, hero worship, currency value debasement.....etc. How many more signs do you fucking need?
Well done
On the one hand, that sounds correct but on the other hand I can't believe anything you say.
GDP is annual
Comparison to the the National Debt in TOTAL are a mathmatical curiosity.
We need to invalidate the shadow banking quadrillions. That's going to take a new currency and default.
Debts will need to be forgiven fairly and not just the chosen.
When looking at the US's current financial status, isn't it a fair estimate that the money owed will never be paid back? That's usually the definition of default and if anyone/anything else was in this situation, repo men would have been called a long time ago.
Thing is, the US can kinda surf on this state almost indefinitely because it has such weight with credit rating agencies, international institutions (IMF, World Bank, etc.) and almost all organizations who normally deal with countries that default on their debt that it possible for them to bend these rules for many decades, surfing on fraudulent accounting, cooked BLS stats, etc. Even though everybody knows, as long as everybody keeps dancing to the tune, the party won't stop.
Regular people will have to deal with reality though.
yeah but that's why most of the rest of the world are quietly slipping into a state of undeclared economic war with the USA
America isn't broke as long as it has its nuclear weapons.
IS_Bankrupt == (Debt > Assets). What do you think 1/3 of the western US is worth? Much more than $16T. Nice try...
In a crisis like this, all must flee to the safety of stocks.
Nothing else is guaranteed to increase in value.
Fricking bring it on! Sometimes I wish Putin would nuke Hollywood, D.C., and Jew York City.
"This is one of the greatest redistributions of wealth in history, from poor to rich, courtesy of a twisted, perverted system of central banking masquerading as capitalism."
It's the biggest robbery in the banking mafia's history. They've been trashing nations and civilizations like this for thousands of years.
What Happens?
We change the name to Hoboland Security